Tag Archives: Student loans

Higher Education Costs – 211 days and counting

With the crisis of ballooning college costs and student debt in the U.S., 2016 presidential candidates are looking for ways to tackle this monumental issue. It is a looming problem that stunts economic growth and makes it difficult for some parents to buy houses, save for their children’s education and their own retirement.

While legislation has been passed to lower interest rates, the current amount for student loan debt is $1.2 trillion dollars. In part, the debt is rising, because there are more students going to college and they’re borrowing more money.

While interest rates have dropped in recent years, the average for each borrower is $29,000.  Students who attend private colleges could owe $100,000 plus.

Below is each candidate’s higher education plan:

Hillary Clinton – The New College Compact

  • Tuition-free community college
  • Debt-free public four-year college
  • Cutting interest rates on federal student loans
  • Government student loan refinancing for borrowers with existing federal loans
  • Making income-based repayment the default plan for all borrowers
  • Expand work study program for students

Clinton would pay for her plan by closing tax loopholes for the wealthy.

Ted Cruz – Deregulate Education

In 2014, Cruz voted against letting borrowers refinance their federal loans with the government.

John Kasich -State Education 

  • Downsizing the U.S. Department of Education and reallocating education funding to states
  • Expanding high school students’ access to courses that provide college credit
  • Tying government funding for public colleges and universities to graduation rates

Throughout the presidential campaign, Kasich has advocated for stronger state involvement in education issues and a reduced role for the federal government.

Bernie Sanders – Debt-free College

  • Tuition-free public college
  • Cutting interest rates on federal student loans
  • Government student loan refinancing for borrowers with existing federal loans

Sanders would fund his program by imposing taxes on certain stock, bond and derivatives trades.

Donald Trump  – No Government Profit

  • Reforming the federal student loans system so the federal government doesn’t profit from student loans
  • Cutting the Department of Education’s budget

Results for each plan

If we followed Senator Ted Cruz’s and Donald Trump’s plans, it would mean defunding all Pell grants, there would be no new federal student loans and no Title IX enforcement. It would cause several colleges to close, due to of the lack of federal money, and less people would be able to attend college.

It would also mean going back to the guaranteed lending, or as it’s known in Washington DC., corporate welfare. However, it should be noted that The Department of Education subsidized the banks when this system was in place.

Governor John Kasich’s strategy places the burden on the states, so there would be pressure for tax increases.

Senator Bernie Sander’s plan: funding free college is unrealistic. The cost is $70 billion per year and, as with other government entitlements, it will drive up taxes and ultimately the national deficit.

Hillary Clinton’s proposal addresses affordability concerns and demands accountability at the institution and state level. However, it doesn’t target relief to the borrowers who need it the most.

Since strategies from the Democratic and Republican candidates are very different, it’s not likely either party would be receptive to the other’s policies. Once again gridlock would halt progress.

College Funding Sources

The Foundation Center 

College Scholarships

US News & World Report College Scholarship Tips

Lebron James and others may pay for your college

How to get strangers to pay for your college

 

 

 

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Reclaiming the American Dream – 233 days and counting

Mark Twain’s famous words, “Everybody talks about the weather, but nobody does anything about it,” could also be applied to The Middle Class economic problem. Everyone talks about it, but no one does anything to change it.

The reason: “It’s complicated.” Getting political parties to align on the best methodology to create growth in this economic drought is like trying to move a 20-ton lead balloon. All the helium in the world won’t make it fly, and it will take an act of God to get it to budge, even incrementally.

Also, most politicians won’t commit to the difficult fixes, for fear of losing their corporate and special interest groups’ financial support.

It’s a tightrope walk for a politician if they want to get elected. Someone needs to step up and take responsibility. 2016 Presidential candidates have made promises to amend trade laws, rewrite tax codes, build infrastructure, bring training back to the U.S., and make college tuition free, but these suggestions won’t create jobs, or put more money in Americans’ pockets.

Remember, for a bill to become law, it has to pass through the House of Representatives and the Senate. Lately there’s a lot of gridlock, and all the Executive Orders in the world won’t guarantee a sure thing. They can be contested in a court of law.

Also, these promises won’t help the underemployed or the unemployed. The lower and middle class spend all their income just to live. According to The New York Times, the last three decades have been focused on gains of income for the highest earners. Salaries in some companies haven’t changed for  the middle class jobs in 20 years.

Here are a few of the problems that need to be addressed?

TAXES

Rewriting Tax Codes is a great idea, but changing these codes won’t help unless people are employed.

EDUCATION

Student Loans

There should be a cap on how much past, current and future student loans’ interest can compound to increase the debt.

As for the current student loan debt, individuals who graduated 20 years ago or more should have loans forgiven.  The student loan bubble is much like the housing bubble; these loans are now being shuffled from one lender to another for pennies on the dollar, but costing the middle class stress and economic suffering.

Civil Service Incentive

For those who just graduated, perhaps a program very much like the GI bill can be created for civil service, whereby people volunteer for a small salary. In exchange they receive college tuition.

Child care – A childcare program can be part of the government civil service incentive, which is mentioned above. This will also help lower and middle income families, who cannot afford other care.

Training

There are many non-profit organizations who offer free training programs to lower income families, immigrants and ex-cons. Perhaps, some of these organizations could expand their roles in the community by offering training to the middle class as well.

BUILDING INFRASTRUCTURE

States and cities use sales taxes to build infrastructure. The middle class pays for this through regressive taxes. There is no easy answer for this. Highways, roads and bridges need to be built.

HEALTH INSURANCE

The Affordable Care Act is good, but needs amending. It has helped make healthcare available to some who may not have otherwise had it, has cut back costs to emergency room visits, and made it accessible to those with pre-existing conditions.

However, there are middle class Americans who can’t afford it, but make too much money to get assistance. Also, when tax time comes around, they are penalized. Thus, just taking away more of their income.

Additionally, there are individuals who take advantage of the system, because of the pre-existing condition clause. They only purchase it when they have health issues, and then cancel when they no longer require it. This raises costs to others.

LABOR LAWS

Rewrite the Labor Laws. Affirmative Action needs to be reinstated. It’s essential companies be required to hire qualified Americans from all walks of life. There has been a hiring imbalance for the last 25 years.

Labor Union – Unions are being busted. They are used in collective bargaining to negotiate fairness for those who belong.  Some are known for underhanded, shady behavior. They definitely need to be regulated, but they certainly should not be dismantled.

Foreign companies with offices in the U.S. sometimes hire foreign workers. Often these employees actually commute back and forth to their countries. While working in the United States, they should be required to live here on a permanent basis, thus putting money into our economy.

While people from all over the world should be allowed to work and live in the U.S., a ceiling on how many foreign contract workers a company can employ must be instituted. Often companies will hire green card workers in deference to American employees, because they will take lower wages.

NAFTA AND INTERNATIONAL TRADE

According to The Council on Foreign Relations, there are pros and cons to NAFTA and other foreign trade agreements. These agreements are both economic and foreign policy issues and are meant to benefit all involved. This is what makes them such highly debated topics. They are complicated and used for diplomacy as well as economic sanctions.

Changing these agreements is not a simple undertaking, and not as easy as writing up a business agreement.

THE AMERICAN DREAM

There are so many questions. There is no easy fix for the middle class or the United States economy. Even if a candidate makes a promise, there are no guarantees.

Which candidate will do what’s right for the country?

Which candidate will make America great again?

To quote Mark Twain, “I was seldom able to see an opportunity, until it had ceased to be one.”

Let’s hope the right candidate  wins, and carpe diem, so we all can reclaim The American Dream.

Candidate Predictions

Democrat – Hillary Clinton

Republican – John Kasich